A federal court in Delaware recently granted in part and denied in part a manufacturer’s motion for summary judgment, and denied its motion for judgment on the pleadings. TL of Fla., Inc. v. Terex Corp., 2015 WL 5618893 13-2009-LPS (D. Del. Sept. 24, 2015). At issue was whether Terex had made a number of misrepresentations (or failed to disclose a number of pertinent facts) to its distributor, TL, in relation to the parties’ distributorship agreement. In particular, in filing suit, TL alleged that Terex had failed to disclose the existence of other distributors near TL, had required TL to maintain an amount of inventory not required of other distributors, had represented that there was a market for Terex heavy equipment and parts in southern Florida, and had failed to disclose that Terex was in financial distress and was granting distributorships to any person who asked for one without regard to demand in the marketplace.
In its motion for summary judgment, Terex argued that certain of TL’s claims were barred by a three-year statute of limitations. Terex pointed to a response to an interrogatory in which TL admitted that it learned in June 2009 of the decline in demand for Terex heavy equipment in South Florida, but suit was not filed until 2012. The court mainly agreed and granted in part that motion, but did deny judgment with respect to some of TL’s claims regarding the market for Terex parts and disclosure of how Terex selected distributors.
Terex also moved for judgment on the pleadings on the claims that it failed to disclose that there were nearby distributors that could sell Terex parts and equipment without having to maintain an inventory. Terex pointed to sections of the agreement that it contended foreclosed these claims. These sections noted TL was “nonexclusive” and that Terex was free to appoint other distributors in TL’s territory. In addition, Terex pointed to a merger clause that it contended precluded TL’s claims. Under Florida law, fraud claims are barred if contradicted by or adequately addressed in a subsequent agreement. In this case, however, the court determined neither the provision permitting appointment of new dealers, nor the generic merger clause, specifically addressed the existence of other distributors at the time TL entered into the agreement. Therefore, the manufacturer was denied judgment of dismissal.